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Business History

Background

One of my best professors in college was named Paul Calhoun. Standing out among my most influential teachers, Paul is unique in that he is not an academic; rather, he worked in business for 30+ years, and then retired to become a college professor. I often admire Paul’s path through life and aspire to a similar path for myself.

Should I be lucky enough to teach someday, I would love to lead a course on Business History: examining the rise and fall of the world’s largest and most influential companies (side note: up until I found this webpage, I thought Business History was a novel course idea – evidently HBS has been teaching it since 1927). I figure if I start working now, by the time I’m ready to retire I’ll have a full course syllabus already worked out.

Business History

Ironically, I first become interested in the topic of Business History in an art class (I minored in jewelry and metals in college). David Peterson, my art teacher, and another one of my most influential teachers, was trying to explain the value of failure to my class. Many of us were frustrated by how difficult it was to learn the various metalsmithing techniques and almost all of us failed our first few assignments. After one particularly harsh critique (an exercise where students present their work and get feedback from peers and instructors), David paused and looked around at his students. We were all visibly defeated.

The assignment was to create a design in a piece of scrap metal and then form the metal until it was perfectly flat. It’s much harder than it sounds. In order to get a piece of metal to be perfectly flat, you have to carefully hammer it until it is semi-flat and then sand the surface endlessly, eliminating every last bump and crevasse. By the end of the assignment we had all spent many hours sanding and several of us had actually sanded off our fingerprints. Despite the hard work, few students had fully satisfied the requirements of the assignment.

In a somewhat surprising statement, David said that he wasn’t upset that most of us had failed the assignment. This isn’t something we were used to hearing from a professor and none of us really knew how to react. We all sat quietly as David walked over to a nearby workbench and picked up a tattered piece of sandpaper – the same sandpaper that we all had just spent days laboring over. He flipped over the sandpaper and showed us the logo on the back: 3M.

He asked the class, “Do any of you know what 3M actually stands for?” None of us knew. He explained that 3M originally stood for Minnesota Mining and Manufacturing and the company was founded over 100 years ago. Originally 3M was set up as a mining operation to harvest Corundum (a valuable crystal). However, this first business model turned out to be a spectacular failure. When the founders of 3M got down in their mine, they found that it was actually filled with Anorthosite, which, in contrast to Corundum, was totally worthless.

This development put 3M in quite a predicament – they had a mine sitting on top of a worthless mineral deposit and no real business model. Instead of closing up shop, 3M decided to search for an alternative way to make money. They noticed that carpenters would occasionally come by and ask for buckets of mining dust. Curious why the carpenters wanted the dust, they found that mining dust, applied to a rag, could actually be quite useful to woodworkers who want to sand down the surface of their woodwork. They observed carpenters using their dust and noticed that the dust-on-rag solution worked fairly well, but the dust was inconsistent and it was always falling off the rag. To solve this problem, 3M started making adhesives and selling the mining dust stuck to a piece of paper.

Having completely failed in their first venture, the founders of 3M pivoted their business model from mining, to creating sandpaper, tape and other adhesive-type products.

This story completely inspired me. First, it made me and the other jewelry students feel better about the assignment we had just failed, but second, I could not believe the amount of innovation that went into the 3M products that I used every day. From that moment on, Business History has been a part-time passion of mine and I hope to be able to share the passion someday (way down the road) as a teacher.